WB highly appreciates the operation model of VBSP
(VBSP News) In recent years, the World Bank (WB) has always paid close attention to the activities of VBSP. Although there were doubts about the role of VBSP at the beginning, after a long time of witnessing the development of VBSP, the WB has had studies on the VBSP's successful operating model.
Mr. Ketut Kusuma - WB Senior Financial Sector Specialist made a speech at the conference on reviewing the Development Strategy of VBSP for the 2010-2020 period and receiving the title "Hero of Labor" in the renovation period
In 2009, in the report titled “Vietnam: Developing a Comprehensive Strategy to Expand the Access of the Low Income Poor to Microfinance Services”, the WB believed that the subsidized interest rates plus the target market of the VBSP would limit the ability of other microfinance institutions to serve the poorest, and thus VBSP would not have the potential to extend lending to the poor.
However, from 2018, within the Financial Inclusion Support Framework (FISF), the WB has conducted an assessment of the VBSP, the purpose of which is to evaluate the effectiveness of the implementation of the goals in VBSP's Development Strategy for the period of 2011-2020 and propose solutions for the strategy in next phase of VBSP. The results show that VBSP has basically achieved the goals set out in its development strategy for the period 2011-2020, which is to diversify products and services and actually, VBSP has moved towards an environment of more diversified products. Now VBSP has been providing a set of various credit products, with more than 20 credit programs for different types of lending needs, offered at subsidized interest rates or close to the market rates. Credit is the main product of VBSP, but savings are gradually increasing from low to significant level. As a result, the report states that “VBSP is the largest microfinance provider in Vietnam and Asia”.
At the conference on reviewing the Development Strategy of VBSP for the 2010-2020 period and receiving the title "Hero of Labor" in the renovation period, Mr. Ketut Kusuma - WB Senior Financial Sector Specialist expressed his impression of VBSP's achievements, especially in recent years with nearly 6.5 million active customers of more than USD 10 billion through a nationwide network of 63 provincial branches, 627 district transaction offices, nearly 11,000 commune transaction points and nearly 173,000 savings and credit groups, Mr. Ketut Kusuma said “Through this network, VBSP has reached about 92% of the total number of potential borrowers and accounts for 87% of the total value of loans in the microfinance market”.
At the national online conference on 5 years of implementation of the Directive No. 40-CT/TW dated November 22, 2014 by the 11th Central Party Secretariat on strengthening the Party's leadership on social policy credit was organized by the Central Economic Committee and State Bank of Vietnam. A representative from the WB in Vietnam, Mr. Alwaleed Fareed Alatabani - Lead Financial Sector Specialist said: “Vietnam has carefully studied the experiences of countries around the world and found its own path that is suitable for Vietnam's culture, history and social structure. It is the establishment of a strong leadership and partnership relationship between the Party committees, the Government authorities with VBSP and socio-political organizations from the central to local levels in the provision and supervision of policy credit.
“The success of the implementation of social policy credit in Vietnam also contributes to Vietnam's early achievement of the millennium goals”
Mr. Alwaleed Fareed Alatabani - Lead Financial Sector Specialist made a speech at the national online conference on 5 years of implementation of the Directive No. 40-CT/TW dated November 22, 2014 by the 11th Central Party Secretariat on strengthening the Party's leadership on social policy credit
With the leadership of the Communist Party of Vietnam and the Government's efforts, VBSP loans have brought many positive socio-economic impacts in recent years, ensuring the right and capacity of access to finance for disadvantaged groups in Vietnam. With the results in the management and operations of VBSP, the WB appreciates VBSP model as a leading microfinance provider in Vietnam, the development journey of VBSP offers valuable experience and lessons learnt to other governments.
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